Agents being exploited by some home sellers

Home sellers have come under some criticism from a prominent real estate personality for deliberately wasting estate agents’ time and even exploiting their professional services.

The broadside came from Stuart Manning, CEO of Seeff Properties this week, who believes the “payment onlyon results”system used by estate agents is being abused by some sellers.

His main gripes are that of sellers surreptitiously plumbing the knowledge of estate agents, particularly in respect of property valuations, while all the time intending to sell privately and using their services to test the market value of their home often with lukewarm intentions of selling.

And while neither tactic was illegal, Manning branded both practices “highly unethical” unless the sellers truthfully and frankly briefed the estate agent from the outset on their intentions. Apart from deceiving and wasting an agent’s time the deception was also inadvertently passed onto would-be buyers resulting in a bad experience for them and unfairly, but inevitably, tarnishing the agent’s professional reputation.

Exploitation of an agent’s time and business opportunity to generate income was becoming a serious industry concern in the current market where the majority of sales were dependent on protracted negotiation.

Manning said some estate agents were generally quite happy to recommend ‘asking prices’ and give advice freely to private sellers as this method of selling was traditionally a lucrative source of stock because of its low success rate.

A trend in the United States that local buyers should take note of is that of agents being remunerated for a specific, rather than a total role, in the process such as advising on marketing, handling the advertising and even negotiation to final selling price. He believed the concept was being successful adopted by some agents.

Manning was particularly critical of homeowners using agencies purely to test the market value of a property. Advertising costs are one of the industry’s largest single expense and by their nature difficult to control as marketing was often pressurised by difficult sellers even though the property might be over priced or under presented. When sellers sign a mandate with an agent they should be one hundred percent sure of their reasons for selling.

Loading comments
More news articles
Guidelines to securing a home loan
29 May 2018
Many young South Africans are working hard to achieve their dream of purchasing their first home. However, the process can be challenging due to the daunting application process, which can take up to 2 years and is often enough to discourage prospective buyers.
read more
Things you should consider before upgrading to a new home
23 Apr 2018
The thing about the property ladder is that at some point in our lives we all have reason to want to climb a rung or two higher. Sometimes, it’s because we’ve outgrown our previous dream home, or because we want to be in a better neighbourhood that’s closer to work or to schools. Sometimes it’s because our circumstances have changed, and we’re taking care of elderly parents or relatives. Sometimes, it’s just because we want a property that reflects the financial status our hard work has won.
read more